11 ms·

99% of the top 1% are "normal workers" like me - engineers at Google - or my cousin - a radiologist - or one of my best friends - an investment banker - or lawy

99% of the top 1% are "normal workers" like me - engineers at Google - or my cousin - a radiologist - or one of my best friends - an investment banker - or lawyers, or owners of successful small businesses, etc... These "normal workers" pay a lot of that 40% of the tax bill. There aren't that many CEOs of Fortune 500 companies and board members, A+ list celebrities, and aristocrats. You're getting into the .01% - that's still 32,000 people! Chicago Booth put together an article with graphs to really show how much the top 0.01% has diverged [1]. The top 0.01% still pays A LOT of the income taxes - about 5% - but that means, mostly hardworking normal people in the top 1% are paying the other 35% of that 40% share of the tax bill. It's not like Bill & Melinda Gates are paying 40% of the tax bill by themselves... [1] https://review.chicagobooth.edu/economics/2017/article/never-mind-1-percent-lets-talk-about-001-percent https://review.chicagobooth.edu/economics/2017/article/never...

aaronchall 6y ago
So using your numbers, the top percent of the top percent pay 1/8 of the taxes that the top percent pay, and the remaining 99% of the top percent pay 7/8 of those taxes. That is still quite disproportionately more. I pay a big chunk of my income in taxes too. Everyone needs to contribute. There's not enough money otherwise, and demanding that Bill Gates pay more, as much as I dislike him, isn't going to do it (and doesn't seem fair as he's already paying his fair share).
- onlyrealcuzzo 6y ago
  The top 1% - minus the top 0.01% - are paying 35% of all income taxes. The top 0.01% themselves are paying another 5%. The bottom 99% are paying the remaining 60%.
roenxi 6y ago
That article is saying top 1% income in the US is numbers higher than $400k! The median was something like $50k or $80k last time I checked. Those aren't normal workers, those are exactly there sort of people who are seen as not contributing their fair share. They physically can't be working harder than a median worker but they're getting multiples of the salary. If someone is going to be supporting society, they are the people with the means.
- tomnipotent 6y ago
  > Those aren't normal workers What's your definition of a normal worker? Lawyers, doctors, dentists, pilots, architects and programmers sound like normal workers to me. This is still millions of people, and I imagine they would think they're normal workers, too. But Fortune 500 CEOs? Well, there's only... 500. Even the combined payroll of the MLB, NBA, NHL, NFL, and MLS is less than 10,000 professional athletes where median pay is $860k, $1.15M, and $8.3M for the NFL, MLB, and NBA respectively.
  - roenxi 6y ago
    I'm going to point at the median worker, they're pretty normal. All the people you're listing aren't necessarily normal workers - observe that some of them are part of the much-vaunted 1%. I don't really understand the mindset that people are grumpy about the 1% and then interpret that as "oh really they're on the side of the 1% they mean the 0.1%". If anything, it might be the other way around and they mean the 10%. The argument is there need to be more transfer payments. A mindset that CEOs need to pay but not fabulously wealthy doctors/dentists/programmers is a mystery to me. What even is the argument? These are people who either need to work for 2 years (pre-tax) to live comfortably for a decade or they're squandering their earnings. They are outrageously wealthy.
  - aiisjustanif 6y ago
    > What's your definition of a normal worker? Lawyers, doctors, dentists, pilots, architects and programmers sound like normal workers to me. Please stop acting like these professions average at the 1% threshold. EPI put the top 1% at $737,697 in 2019 and the top 5% at $309,348 [1]. Average Income of those normal workers [2]: * Lawyer: $148,910 * Dentists (across all specialities): $186,300 * Physicians (across all specialties): $218,850 * Architects: $89,470 * Software engineers (across all specialties): $109,950 * All computer and math specialties: $96,770 * Pilots (All specialties): $163,480 [3] So these “Normal people” are not even apart of the discussion stop making it seem like all these professions seem like they are in the top 1%. It’s paint a really false picture that skews the conversation at large. 1. https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157-8-since-1979/ https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157... 2. https://www.bls.gov/oes/current/oes_nat.htm#23-0000 https://www.bls.gov/oes/current/oes_nat.htm#23-0000 3. I think that number might miss out on all the burn out low level contract airline pilots that make peanuts.
throwaway2037 6y ago
First, I assume when you write "normal workers" that you mean non-executives and non-passive income earners. (Executives can get a lot of equity or dividends that accrue taxes at lower rates; passive income earners use asset depreciation to lessen tax burden.) The top 1% in the US is ~400K USD. Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD. If you look at highly developed economies, it seems hard to provide a healthy social safety net without 50% effective income tax rate on top 1%. In Hongkong, the top effective tax rate is about 15%. The social safety net is appalling. The number of poor, working, elderly people (collecting cardboard in the street to sell by the kilo to recyclers) is heartbreaking. You would not use the public health system, nor the public school system; nor depend upon the national pension, nor unemployment benefits. One bright spot: The public housing system has served well the working class and below. (I joke that 15% only gets you a good metro system and airport.) Hongkong feels like a semi-feudalistic society.
- carlob 6y ago
  > Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD. In my view one of the big problems is that capital gains are taxed less than income from working and they are a proportional tax. The result of that is that once you get to the 0.1 % taxation becomes regressive because a bigger chunk of your income comes from capital gains.
  - throwaway2037 6y ago
    +9000 votes! I agree 110%. I didn't say it, but the 50-55% "all-in" should also include capital gains receiving no special treatment for high-income people.
refurb 6y ago
Is this satire? I mean, you’re pointing your finger at the <1% above you, claiming you’re just “an normal worker” who is shouldered with the burden of paying taxes, yet you’re ignoring the fact you make more money than 99% of people. 99%! And I love the call out about your everyday working schmuck cousin, you know, the radiologist, who is in one of the highest paid professions and if he’s in the US is likely making close to $500,000 per year. Almost 10x the median US salary. https://www.salary.com/research/salary/alternate/radiologist-salary https://www.salary.com/research/salary/alternate/radiologist...
- bluecalm 6y ago
  They make more money because they are more productive and their services are highly valued. Those people already bear disproportional burden when it comes to taxes. I mean, what do you really want? Everyone works according to abilities and everyone is provided for according to their needs?
  - refurb 6y ago
    I’m not arguing the rich need to pay more, I’m arguing that the OP is wrong to argue he’s just a “normal worker” and shouldn’t be paying a large tax burden when he makes more than 99% of the population. Basically when the OP says “the rich should pay more” I’m saying “ok, but that includes you”
    - salawat 6y ago
      You're misdefining rich I think in the sense it may be being used in this case as a proxy for "companies and taxpayers doing things to obfuscate their actual flow of monetary value". Even if one makes say 1000000 in income, no equities, and takes the standard deduction, they are not the Rich being lamented here. They would not be doing end runs around tax obligations. Yes, you blow the minimum wage folks out of the water salary-wise, but it doesn't mean they are in any different a boat than any other tax payer trying to do it right. Which can actually be surprisingly difficult if you do anything other than basically "money comes in, money goes out". I'm actually somewhat afraid of doing any of the more advanced reading in the tax code, because it'll probably end up with me makimg a few appointments with the IRS to get someone to explain things to me. Their writing style is terrible, and I tend to lose track in the forests of ambiguous antecedents. I say this as someone who isn't a stranger to reading legal docs or standards for fun.
throwaway2037 6y ago
Reading the other comments, I looked closer at your choice of professions. 1) Engineers at Google earning 400K+ USD per year are receiving a large chunk in stock grants. I guess 1/3 to 1/2. (And the last 10 years have been very, very good for equity prices in tech majors.) I assume those receive capital gains tax treatment when sold. If held for at least one year, you receive generous tax savings. Is that fair? 2) Radiologist is probably paid 100% cash or part in deferred (cash) comp. I doubt their receive equity in their public/listed hospital group. Dear Reader Doctors: Please correct me if I am wrong! Also: Are you aware of incomes for highly-skilled specialists in other high-developed countries with good national healthcare systems? I guess about 50% less. Look at Germany, Netherlands, France, Japan, etc. The US is a global outlier on healthcare costs and incomes. 3) Investment banker is a loose term, because you can be a very senior quant on Wall Street can earn 500K USD. Or you can be a M&A i-banker or trader or portfolio manager and easily earn more than 500K USD in good years, but a good chunk will be equity. I guess 1/4 to 1/3. If you make crazy money (millions), surely 50% equity. That said, equity in an investment bank isn't a very good investment. Look at the last ten years compared to big tech. Big tech is killing ibanks on equity returns. Still... that equity grant will get beneficial tax treatment. In this narrow scenario, what benefit does this serve for the wider economy? I see little. 4) Lawyers: Probably paid all cash, possibly deferred comp (cash). Most white shoe law firms that can pay 400K+ USD are not public/listed, so equity isn't the same, even if there is /some/ measure of profit-sharing. Please correct me if I am wrong about public/listed law firms. Just before I hit reply, I thought of another type of special case: corporate counsel. If you work an in-house counsel in New York City, you can easily make 400K+ USD as a senior lawyer. And your company probably pays you some equity. (We can all this i-bank/legal hybrid job.) 5) Small business owners: These are essentially small-time executives who can structure all kinds of non-income payments to themselves and reduce their tax burden. Important: I would also separate intellectual property-heavy businesses (high-value services) vs traditional mom-n-pop shops, like chain of gift shops or pizza restaurants. The return-on-equity is hugely different. That said, in most developed economies, small-to-medium enterprises generate the lion's share of new jobs. (Huzzah to that.) Still, the same tax benefits the owner can structure for themselves will not also be arranged for the "normal workers". Again: Is this fair?
- 6y ago
aiisjustanif 6y ago
EPI put the top 1% at $737,697 in 2019 and the top 5% at $309,348 [1]. Average Income of those normal workers [2]: * Lawyer: $148,910 * Dentists (across all specialities): $186,300 * Physicians (across all specialties): $218,850 * Architects: $89,470 * Software engineers (across all specialties): $109,950 * All computer and math specialties: $96,770 * Pilots (All specialties): $163,480 [3] So these “Normal people” are not even apart of the discussion stop making it seem like all these professions seem like they are in the top 1%. It’s paint a really false picture that skews the conversation at large. 1. https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157-8-since-1979/ https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157... 2. https://www.bls.gov/oes/current/oes_nat.htm#23-0000 https://www.bls.gov/oes/current/oes_nat.htm#23-0000 3. I think that number might miss out on all the burn out low level contract airline pilots that make peanuts.
- onlyrealcuzzo 6y ago
  You can use data from the IRS [1]. The cutoff for the 1% for households is around $550k. For individuals it's around $400k. The median salary for radiologists is $422k [2]. The median salary for a Google Sr Engineer is >$350k [3] (not including Google stock appreciation - which pushes this well into the $500k range). [1] https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income... [2] https://www.salary.com/research/salary/alternate/radiologist-salary https://www.salary.com/research/salary/alternate/radiologist... [3] https://www.levels.fyi/company/Google/salaries/Software-Engineer/ https://www.levels.fyi/company/Google/salaries/Software-Engi...

aaronchall 6y ago

So using your numbers, the top percent of the top percent pay 1/8 of the taxes that the top percent pay, and the remaining 99% of the top percent pay 7/8 of those taxes. That is still quite disproportionately more. I pay a big chunk of my income in taxes too. Everyone needs to contribute. There's not enough money otherwise, and demanding that Bill Gates pay more, as much as I dislike him, isn't going to do it (and doesn't seem fair as he's already paying his fair share).

onlyrealcuzzo 6y ago
The top 1% - minus the top 0.01% - are paying 35% of all income taxes. The top 0.01% themselves are paying another 5%. The bottom 99% are paying the remaining 60%.

roenxi 6y ago

That article is saying top 1% income in the US is numbers higher than $400k! The median was something like $50k or $80k last time I checked. Those aren't normal workers, those are exactly there sort of people who are seen as not contributing their fair share. They physically can't be working harder than a median worker but they're getting multiples of the salary. If someone is going to be supporting society, they are the people with the means.

tomnipotent 6y ago
> Those aren't normal workers What's your definition of a normal worker? Lawyers, doctors, dentists, pilots, architects and programmers sound like normal workers to me. This is still millions of people, and I imagine they would think they're normal workers, too. But Fortune 500 CEOs? Well, there's only... 500. Even the combined payroll of the MLB, NBA, NHL, NFL, and MLS is less than 10,000 professional athletes where median pay is $860k, $1.15M, and $8.3M for the NFL, MLB, and NBA respectively.
- roenxi 6y ago
  I'm going to point at the median worker, they're pretty normal. All the people you're listing aren't necessarily normal workers - observe that some of them are part of the much-vaunted 1%. I don't really understand the mindset that people are grumpy about the 1% and then interpret that as "oh really they're on the side of the 1% they mean the 0.1%". If anything, it might be the other way around and they mean the 10%. The argument is there need to be more transfer payments. A mindset that CEOs need to pay but not fabulously wealthy doctors/dentists/programmers is a mystery to me. What even is the argument? These are people who either need to work for 2 years (pre-tax) to live comfortably for a decade or they're squandering their earnings. They are outrageously wealthy.
- aiisjustanif 6y ago
  > What's your definition of a normal worker? Lawyers, doctors, dentists, pilots, architects and programmers sound like normal workers to me. Please stop acting like these professions average at the 1% threshold. EPI put the top 1% at $737,697 in 2019 and the top 5% at $309,348 [1]. Average Income of those normal workers [2]: * Lawyer: $148,910 * Dentists (across all specialities): $186,300 * Physicians (across all specialties): $218,850 * Architects: $89,470 * Software engineers (across all specialties): $109,950 * All computer and math specialties: $96,770 * Pilots (All specialties): $163,480 [3] So these “Normal people” are not even apart of the discussion stop making it seem like all these professions seem like they are in the top 1%. It’s paint a really false picture that skews the conversation at large. 1. https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157-8-since-1979/ https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157... 2. https://www.bls.gov/oes/current/oes_nat.htm#23-0000 https://www.bls.gov/oes/current/oes_nat.htm#23-0000 3. I think that number might miss out on all the burn out low level contract airline pilots that make peanuts.

throwaway2037 6y ago

First, I assume when you write "normal workers" that you mean non-executives and non-passive income earners. (Executives can get a lot of equity or dividends that accrue taxes at lower rates; passive income earners use asset depreciation to lessen tax burden.) The top 1% in the US is ~400K USD. Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD. If you look at highly developed economies, it seems hard to provide a healthy social safety net without 50% effective income tax rate on top 1%. In Hongkong, the top effective tax rate is about 15%. The social safety net is appalling. The number of poor, working, elderly people (collecting cardboard in the street to sell by the kilo to recyclers) is heartbreaking. You would not use the public health system, nor the public school system; nor depend upon the national pension, nor unemployment benefits. One bright spot: The public housing system has served well the working class and below. (I joke that 15% only gets you a good metro system and airport.) Hongkong feels like a semi-feudalistic society.

carlob 6y ago
> Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD. In my view one of the big problems is that capital gains are taxed less than income from working and they are a proportional tax. The result of that is that once you get to the 0.1 % taxation becomes regressive because a bigger chunk of your income comes from capital gains.
- throwaway2037 6y ago
  +9000 votes! I agree 110%. I didn't say it, but the 50-55% "all-in" should also include capital gains receiving no special treatment for high-income people.

refurb 6y ago

Is this satire? I mean, you’re pointing your finger at the <1% above you, claiming you’re just “an normal worker” who is shouldered with the burden of paying taxes, yet you’re ignoring the fact you make more money than 99% of people. 99%! And I love the call out about your everyday working schmuck cousin, you know, the radiologist, who is in one of the highest paid professions and if he’s in the US is likely making close to $500,000 per year. Almost 10x the median US salary. https://www.salary.com/research/salary/alternate/radiologist-salary https://www.salary.com/research/salary/alternate/radiologist...

bluecalm 6y ago
They make more money because they are more productive and their services are highly valued. Those people already bear disproportional burden when it comes to taxes. I mean, what do you really want? Everyone works according to abilities and everyone is provided for according to their needs?
- refurb 6y ago
  I’m not arguing the rich need to pay more, I’m arguing that the OP is wrong to argue he’s just a “normal worker” and shouldn’t be paying a large tax burden when he makes more than 99% of the population. Basically when the OP says “the rich should pay more” I’m saying “ok, but that includes you”
  - salawat 6y ago
    You're misdefining rich I think in the sense it may be being used in this case as a proxy for "companies and taxpayers doing things to obfuscate their actual flow of monetary value". Even if one makes say 1000000 in income, no equities, and takes the standard deduction, they are not the Rich being lamented here. They would not be doing end runs around tax obligations. Yes, you blow the minimum wage folks out of the water salary-wise, but it doesn't mean they are in any different a boat than any other tax payer trying to do it right. Which can actually be surprisingly difficult if you do anything other than basically "money comes in, money goes out". I'm actually somewhat afraid of doing any of the more advanced reading in the tax code, because it'll probably end up with me makimg a few appointments with the IRS to get someone to explain things to me. Their writing style is terrible, and I tend to lose track in the forests of ambiguous antecedents. I say this as someone who isn't a stranger to reading legal docs or standards for fun.

throwaway2037 6y ago

Reading the other comments, I looked closer at your choice of professions. 1) Engineers at Google earning 400K+ USD per year are receiving a large chunk in stock grants. I guess 1/3 to 1/2. (And the last 10 years have been very, very good for equity prices in tech majors.) I assume those receive capital gains tax treatment when sold. If held for at least one year, you receive generous tax savings. Is that fair? 2) Radiologist is probably paid 100% cash or part in deferred (cash) comp. I doubt their receive equity in their public/listed hospital group. Dear Reader Doctors: Please correct me if I am wrong! Also: Are you aware of incomes for highly-skilled specialists in other high-developed countries with good national healthcare systems? I guess about 50% less. Look at Germany, Netherlands, France, Japan, etc. The US is a global outlier on healthcare costs and incomes. 3) Investment banker is a loose term, because you can be a very senior quant on Wall Street can earn 500K USD. Or you can be a M&A i-banker or trader or portfolio manager and easily earn more than 500K USD in good years, but a good chunk will be equity. I guess 1/4 to 1/3. If you make crazy money (millions), surely 50% equity. That said, equity in an investment bank isn't a very good investment. Look at the last ten years compared to big tech. Big tech is killing ibanks on equity returns. Still... that equity grant will get beneficial tax treatment. In this narrow scenario, what benefit does this serve for the wider economy? I see little. 4) Lawyers: Probably paid all cash, possibly deferred comp (cash). Most white shoe law firms that can pay 400K+ USD are not public/listed, so equity isn't the same, even if there is /some/ measure of profit-sharing. Please correct me if I am wrong about public/listed law firms. Just before I hit reply, I thought of another type of special case: corporate counsel. If you work an in-house counsel in New York City, you can easily make 400K+ USD as a senior lawyer. And your company probably pays you some equity. (We can all this i-bank/legal hybrid job.) 5) Small business owners: These are essentially small-time executives who can structure all kinds of non-income payments to themselves and reduce their tax burden. Important: I would also separate intellectual property-heavy businesses (high-value services) vs traditional mom-n-pop shops, like chain of gift shops or pizza restaurants. The return-on-equity is hugely different. That said, in most developed economies, small-to-medium enterprises generate the lion's share of new jobs. (Huzzah to that.) Still, the same tax benefits the owner can structure for themselves will not also be arranged for the "normal workers". Again: Is this fair?

6y ago

aiisjustanif 6y ago

EPI put the top 1% at $737,697 in 2019 and the top 5% at $309,348 [1]. Average Income of those normal workers [2]: * Lawyer: $148,910 * Dentists (across all specialities): $186,300 * Physicians (across all specialties): $218,850 * Architects: $89,470 * Software engineers (across all specialties): $109,950 * All computer and math specialties: $96,770 * Pilots (All specialties): $163,480 [3] So these “Normal people” are not even apart of the discussion stop making it seem like all these professions seem like they are in the top 1%. It’s paint a really false picture that skews the conversation at large. 1. https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157-8-since-1979/ https://www.epi.org/blog/top-1-0-of-earners-see-wages-up-157... 2. https://www.bls.gov/oes/current/oes_nat.htm#23-0000 https://www.bls.gov/oes/current/oes_nat.htm#23-0000 3. I think that number might miss out on all the burn out low level contract airline pilots that make peanuts.

onlyrealcuzzo 6y ago
You can use data from the IRS [1]. The cutoff for the 1% for households is around $550k. For individuals it's around $400k. The median salary for radiologists is $422k [2]. The median salary for a Google Sr Engineer is >$350k [3] (not including Google stock appreciation - which pushes this well into the $500k range). [1] https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income... [2] https://www.salary.com/research/salary/alternate/radiologist-salary https://www.salary.com/research/salary/alternate/radiologist... [3] https://www.levels.fyi/company/Google/salaries/Software-Engineer/ https://www.levels.fyi/company/Google/salaries/Software-Engi...